In this session, a speaker from the European Commission DG Trade presented the view of the European Union on the question of whether there should be a new trade round and if so, what should be on the agenda.

First, on the link between multilateral trade rules and poverty, the basic working assumption is that multilateral liberalisation is preferred to other forms of liberalisation. In this context, the speaker noted that the impact of WTO rules is linked to the promotion of transparent, non-discriminatory rule based governance, which limits opportunities for discretionary policy interventions and rent-seeking. But, for agreement to be reached, sensitivities by sector and country must be accommodated and rules designed with the flexibility to take into account institutional capacity. This raises the question of how to categorise countries in the analysis and application of agreements.

It follows that the EU is strongly in favour of an inclusive agenda that contributes to substantially enhanced market access and for which the ‘development dimension’ is a key aspect. If a new round is to be launched, additional decisions before Doha are needed. As highlighted in Session 1, confidence and capacity building are important. The "Everything But Arms" (EBA) Agreement is an example of the former, it is politically important as it demonstrates the willingness to confront domestic lobbies.

The EU acknowledges that agreements from the Uruguay Round are often imperfect. Without re-opening everything, the key is to improve existing WTO agreements, taking into account developing country concerns. Thus the EU is ready to negotiate on priority areas (e.g. antidumping, subsidies, TBT, SDT and TRIPS). Further, to ensure that a trade round does not harm development, the costs of implementation of agreements should be taken into account in the next negotiations.

On specific agenda items, the EU position on the following were mentioned:

• Technical barriers to trade (TBT), sanitary and phytosanitary measures, as well as antidumping, subsidies and safeguards are important issues affecting market access and where the EU is ready to negotiate (within agreed parameters).

• There is considerable flexibility in the provisions of the TRIPS agreement, and the possibility of more clearly formulating rules under the agreement should remain open.

• There EU has no objection to negotiations on Special and Differential Treatment.

And on new agenda items:

• The EU is in favour of putting investment and competition policy on the agenda. But is open to the possibility of developing countries having an opt-out if they are not convinced of the development benefits.

• The EU approach to labour and environmental standards do not require a separate agreement. But existing rules should be clarified rather than left to dispute settlement.

In the discussion, three issues received most attention: EBA, regionalism and the inclusion of political elements in trade agreements:

• On EBA, not denying its political importance, the gains are limited since it only applies to the least developed countries and exceptions are made for the most important products from developing countries. In addition, the possible application of the safeguard clause may discourage foreign investors from investing in the least developed countries.

• On regionalism, though the EU’s priority may be to launch a multilateral round, it is also a supporter of regional agreements. Participants noted the possible conflict in this approach, especially if developing countries divert their capacity from multilateral to regional negotiations. Further, since developing countries may approach trade negotiations with the EU in a broader context that links them to other (financial) items such as development assistance, is this not providing the wrong incentives in favour of regional as opposed to multilateral negotiations? Is this appropriate when dissatisfaction with the multilateral system is already seen as a cause of the increased attention for regional agreements and increasing regional protection?

• On the linking of trade and political elements (e.g. human rights, labour and environmental standards, etc.) in agreements, almost all bilateral treaties of the EU (the so-called EU agreements) contain political elements. Similarly, one reason for the US resistance to implementing something similar to the EBA initiative is that it prefers to provide discretionary access that allows trade to be linked to its political agenda. Essentially, in regional negotiations, developed countries are using market access as a strategic asset to achieve non-trade objectives. This provides a strong argument in favour of a new multilateral trade round where developing countries would be on a more equal footing.